Swiss National Bank Holds Rates Amid Improved Economic Outlook

The Swiss National Bank has maintained its interest rates at 0%, the lowest among major central banks, due to an improved economic outlook following a U.S. tariff reduction. Despite lower-than-expected inflation, the SNB remains optimistic about medium-term stability. The decision aligns with market expectations, supporting a sluggish Swiss economy.

The Swiss National Bank (SNB) has decided to keep its policy interest rate unchanged at 0%, citing an enhanced economic outlook due to a recent reduction in U.S. tariffs on Swiss goods. While inflation has remained lower than projected, the SNB is hopeful about medium-term economic stability.

The decision was anticipated by markets and analysts, as the Swiss economy contracted by 0.5% in the third quarter, and inflation fell to 0% in November, the lower end of the SNB's target range. The bank stated that while recent inflation rates have been slightly lower than expected, long-term inflationary pressures remain unchanged.

The unchanged rate marks SNB's first policy meeting since Switzerland reached a deal with the U.S. to lower tariffs on Swiss goods from 39% to 15%. The SNB noted improved economic prospects due to these lower tariffs and a favorable global economic trend, despite the challenges posed by a stronger Swiss franc and decreased inflation from cheaper imports.

(With inputs from agencies.)